Army Offers More Budget Crunch Guidance

Feb. 8, 2013 - 06:23AM
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Today is the deadline for the services to submit their sequestration and continuing resolution (CR) implementation plans to the secretary of Defense, and according to an internal Army document obtained by Defense News, the service has identified more potential operational impacts if Congress and the White House don’t get the nation’s fiscal house in order by March 1 (sequestration deadline) and March 27 (the end of the current CR).

In the Feb. 6 memo titled “Operating Under Uncertain Budgets,” the Army estimates that it will take as long as 150 days to restart any contract that has been shut down due to budget pressure, and that “this considerable time lag creates a FY14 problem. Workload to renegotiate contracts will over burden an already taxed acquisition workforce and likely increase costs in the short term.”

Some of those contracts are significant. Other documents have already reported that 21 of the service’s 26 major acquisition priorities would be at risk to incur significant Nunn-McCurdy breaches, which would in turn impact 300 contractors and 1,000 suppliers in 40 states.

The service has previously estimated that sequestration would slice $5.3 billion from its Operations & Maintenance (O&M) accounts, while a continuing resolution for the remainder of fiscal year 2013 would chop another $6 billion, and anywhere from $5 billion to $7 billion could be lost for Overseas Contingency Operations requirements that go toward funding operations in Afghanistan such as transporting food and equipment for soldiers and civilian personnel.

That $18 billion shortfall in funding for the remainder of fiscal year 2013 would also force the service to “curtail Operational Test and Evaluation operations affecting program of record (POR) development and fielding schedules, adding further costly delays to near mature acquisition programs and delaying fielding needed modern equipment to Soldiers.”

Service leadership has already issued guidance specifying approval authorities for contracts worth more than $250 million under Army authority, and $500 million under the authority of the undersecretary of defense for acquisition.

The Feb. 6 document also said that all Science and Technology programs involving “academic and industry partners in over 120 Congressional Districts across thirty-eight states and the District of Columbia” are at risk, with the service due to submit a report to the secretary of Defense next week that “will include impacts to DOD research priorities.”

When it comes to the potential 22-day furlough of 251,000 civilian employees, the Army now says that the action would save an estimated $1.9 billion, while potentially costing employees 20 percent of their pay.

Next week, the service chiefs, Deputy Secretary of Defense Ashton Carter and DoD Comptroller Robert Hale are headed to Capitol Hill for two days’ worth of testimony about the potential effects of sequestration in front of the Senate and House armed services committees.